## Facts

- African-American Mississippi citizens brought a certified Rule 23(b)(2) class action in federal court seeking injunctive and declaratory relief to dismantle de jure segregation in Mississippi’s public higher-education system.
- The litigation proceeded for nearly three decades, involving multiple trials and appeals that largely resolved controlling liability principles but left continuing disputes about the scope and form of remedies.
- The private class plaintiffs, the United States (as intervenor), and Mississippi officials negotiated a comprehensive settlement to address continuing effects of prior de jure segregation.
- The settlement committed approximately $500 million over seventeen years for remedial measures, including support for historically black institutions and other systemwide changes.
- The settlement included a lump-sum attorneys’ fee provision intended to cover fees for class counsel collectively.
- After a Rule 23(e) fairness hearing and legislative action supporting and funding the settlement, the district court approved the agreement as fair, adequate, and reasonable.
- Certain class members objected, sought to opt out to pursue separate relief, and appealed; one class attorney also sought to litigate fees separately from the settlement’s lump-sum fee arrangement.

## Issues

1. Whether the district court abused its discretion under Rule 23(e) in approving the class settlement as fair, adequate, and reasonable.
2. Whether members of a Rule 23(b)(2) injunctive/declaratory relief class were entitled to opt out, and whether denial of opt-out was error.
3. Whether class counsel could pursue attorneys’ fees independently despite a court-approved settlement providing a lump-sum fee award for all class attorneys.

## Decision

- The Fifth Circuit affirmed the district court’s approval of the settlement, holding there was no abuse of discretion under Rule 23(e).
- The court affirmed denial of opt-out requests, holding Rule 23(b)(2) classes are generally mandatory and do not carry an opt-out right in these circumstances.
- The court affirmed approval of the settlement’s lump-sum fee structure and rejected counsel’s attempt to proceed separately on fees.

## Legal Principles

- A class settlement may be approved under Rule 23(e) when it is fair, adequate, and reasonable in light of factors including: absence of fraud or collusion; litigation complexity, expense, and likely duration; the litigation’s stage and discovery record; the likelihood of success and remedial uncertainty; the range of possible relief; and the views of class counsel, class representatives, and class members.
- Rule 23(b)(2) classes seeking injunctive or declaratory relief are typically mandatory; absent members ordinarily have no opt-out right, particularly where relief is collective and uniform administration of the remedy would be impaired by opt-outs.
- Courts may approve aggregate (lump-sum) attorneys’ fee awards as part of an integrated class settlement, and individual attorneys generally lack a right to pursue separate fee litigation that would disrupt the approved settlement structure.

## Conclusion

The Fifth Circuit upheld a comprehensive, long-negotiated higher-education desegregation settlement as fair under Rule 23(e), confirmed that objecting members of a Rule 23(b)(2) class could not opt out to seek individualized relief, and sustained a lump-sum attorneys’ fee provision as a permissible component of the approved settlement.


Ayers v. Thompson, 358 F.3d 356 (5th Cir. 2004)